The UK government is giving away millions of pounds from the UK aid budget to privatisation consultants engaged to ‘advise’ developing countries on handing over their public services to the private sector, according to a new report from anti-poverty campaign group War on Want.

The report – Profiting from Poverty: Privatisation consultants, DFID and public services – reveals how consultancy firms such as PricewaterhouseCoopers, KPMG and Deloitte Touche Tohmatsu have all won vast sums in ‘aid-funded business’ to direct the privatisation of water, rail, electricity and postal services in developing countries. Since 1997, the Department for International Development (DFID) has also paid over Â£34 million from the aid budget to extreme right wing think-tank the Adam Smith Institute.

Report author John Hilary, Director of Campaigns and Policy at War on Want, said: "There is a solid body of evidence showing that privatisation of public services increases poverty in developing countries. DFID’s mission is to eradicate poverty, yet it has taken the lead in promoting the privatisation of public services worldwide. UK aid money should not be given away to privatisation consultants. The aid budget must only be used for genuine poverty reduction initiatives."

War on Want is calling on the UK government to:

- Stop imposing privatisation on developing countries as a condition of development assistance.

- Establish an independent commission to take evidence on the impacts of public services privatisation in developing countries.

- To refrain from awarding new privatisation contracts to consultants until this commission has reported its findings.